TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 210
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....unds of appeal for all the assessment years read as under:- "1. On the facts & circumstances of the case the CIT(A) has erred in holding the assessment invalid on the basis of address in search warrant without considering that warrant was duly served upon Shri Pradeep Kumar, who is director of assessee company as acknowledged by him while signing search warrant, and also the Vice President (Corporate Affairs) of Heritage Beverages Pvt. Ltd. situated on address which was mentioned in search warrant. 2. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 3. Heard and perused the records. Additions were made u/s 68 of the Act on account of unexplained funds received in form of share capital and share premium. Being aggrieved with the order of AO, the assessee filed appeal before the CIT(A) and where by impugned order ld. CIT(A) observed that the search warrant was issued in the name of the assessee company and was served at the address "Plot No.237-238, Udyog Vihar, Phase-1, Gurgaon which is the address of M/s Heritage Beverages (P) Limited". The Actual address of the assessee company is "20....
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....Hon'ble High Court of Delhi in the case of MDLR Resorts (P.) Ltd., v. CIT 40 taxmann.com 365 [2013] ii) Decision of Hon'ble High Court of Karnataka in the case of PCIT v. Associated Mining Co. 108 taxmann.com 564 [2019] iii) Decision of Hon'ble High Court of Gujarat in the case of Zinzuwadia and Sons v. DCIT, Circle -2(3), Ahmedabad 108 taxmann.com 42 [2019] iv) ITAT E-Bench decision in the case of M/s MSG Finance India Pvt. Ltd. having ITA No. 2270/Del2018 for A.Y. 2011-12, company of the same group and having identical facts. 6. It was thus submitted that observation of the Ld. CIT(A) that "no search was conducted at the premises of the appellant" is factually incorrect and not acceptable. It goes against the fundamentals of issue of warrant of authorization u/s 132 of the Act. It is not necessary that warrant has to be issued only at the premises of registered office of the company or corporate office, factory or godown. A search warrant can be authorize to any other place where the issuing authority satisfies and reasons to suspect that the material / evidences pertaining to the assessee have been kept and are to be found. 7. Ld. DR relied the decision of the coordinate....
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.... find that names of Mr. Virender Pal Kandhari, Virender Pal Kandhari, HUF, Neena Khandhari, M/s Enrich Agro Food products Pvt. Ltd., Versatile Polytech Pvt. Ltd. Juicy Beverages Pvt. Ltd., Heritage Beverages Pvt. Ltd., Focus Buildwell Pvt. Ltd., Universal Electronics & Communication Pvt. Ltd., MSG Finance India Pvt. Ltd., Indo Gulf Infrastructure Investment Pvt. Ltd. Sentinel Systems Pvt. Ltd. have been mentioned as the persons to be searched. The place of search is mentioned as Plot No.237-238, Udyog Vihar, Phase I, Gurugram. 9.1 Then what we find is that at page No.113 as part of this authorization, there is an endorsement signature dated 29.03.2015 of Shri Pradeep Kumar, who has signed as Director of Indo Gulf Infrastructure Pvt. Ltd. and MSG Finance India Pvt. Ltd., only. He was not required to sign on behalf of assessee. We also could not find any justification from ld. DR why only authorized officer asked or accepted the signatures of Shri Pradeep Kumar for two companies and not for assessee. 9.2 Then, at page No.112 of the paper book, there is a panchnama wherein the names of these parties are mentioned. This Panchnama mentions that Mr. Virender Pal Kandhari/Pradeep Kumar ....
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....sdiction for search assessment u/s 153A of the Act, qua the assessee. Mumbai Tribunal in J.M. Trading Corporation in ITA Nos.1435 to 1438/Mum/2009 has held that " The question for our determination is whether search was though initiated against the assessee was conducted on the assessee. The initiation of search and conduct of the search are two different aspects of search and seizure proceedings." Thus what is significant for the issue of notice u/s 153A of the Act is the initiation of search and secondly, there is a marked distinction between `initiation' and `commencement' of search. In common parlance, 'Initiation' means the beginning of a process or, in other words, a first step in the entire process. Search commences with the issue of authorization by the competent authority. Thus, the 'initiation' of search commences with the issue of authorization by the DIT. 'Execution' of search warrant, which is a step after the initiation of search, takes place later on, which leads to the actual conduct of the search at the premises of the person searched. 10.1 In Promain Ltd. V. DCIT [2005] 95 ITD 489 (Del. Trib.)(SB) the law is settled as follows; "....
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....ough the provisions of section 158BC of the Act are not applicable to searches conducted after 31-5-2003, but the provisions of section 132 of the Income-tax Act are continuing on the statute implying thereby that the provisions of section 153A of the Act are only applicable in case valid search is conducted against the assessee under section 132 of the Act. Accordingly, we declare the assessments made against the assessee under the provisions of section 143(3) read with section 153A of the Income-tax Act are null and void and direct the Assessing Officer to cancel the same. Thus, the issue related to the validity of search raised by the assessee is allowed." 10.3 This was confirmed by the Hon'ble High Court of Bombay in Tax Case Appeal No.589 of 2009 dated 29.06.2009 observing as under:- "Heard learned Counsel for the parties. The question sought to be raised in this appeal is relating to the conduct of the search. The assessment made against the assessee under the provisions of section 143(3) read with section 153A of the Income Tax Act. The Tribunal has categorically recorded a finding of fact of initiation of the search that non compliance to the provisions of the Act ....
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....e, the proceedings u/s 153A are ex-facie illegal, arbitrary and without jurisdiction and hence the assessment order is hereby annulled." 12. The reliance of ld. DR in the case of MSG Finance Pvt. Ltd.(supra) is distinguishable as in that case, in para 12, the coordinate Bench has specifically made a factual conclusion that Shri Pradeep Kumar as director of that assessee M/s MSG Finance India Pvt. Ltd., had seen the warrant, signed and was present throughout the search procedure. Certainly, warrant may not be issued only at the address of a company, but, when it comes to the question of examining whether a search has been initiated and concluded in consequence to warrant of authorization, then, in case of a company, which has a distinct legal identity, than its shareholders or directors, it should be established that initiation of search and execution of warrant of authorization was upon the company at its registered office or at any other place where the assessee company was represented by authorized person or a director. That is not the case here as was in the case of MSG Finance India Pvt. Ltd. 13. Coming to decisions relied by revenue of PCIT v. Associated Mining Co. (supra), ....